Migration in the European Union
Migration and Development Brief
Migration and Remittances Unit World Bank
13
November 8, 2010
Outlook for Remittance Flows 2011-12 Recovery after the crisis, but risks lie ahead
By Sanket Mohapatra, Dilip Ratha and Ani Silwal1
Officially recorded remittance flows to developing countries are estimated to increase by 6 percent to $325 billion in 2010. This marks a healthy recovery from a 5.5 percent decline registered in 2009. Remittance flows are expected to increase by 6.2 percent in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012. (Note that the World Bank’s definition of developing countries has changed: Poland, which is estimated to have received $9.1 billion in 2010, is no longer classified as a developing country.) This outlook for remittance flows, however, is subject to the risks of a fragile global economic recovery, volatile currency and commodity price movements, and rising anti-immigration sentiment in many destination countries. From a medium-term view, three major trends are apparent: (a) a high level of unemployment in the migrant-receiving countries has prompted restrictions on new immigration; (b) the application of mobile phone technology for domestic remittances has failed to spread to cross-border remittances; and (c) developing countries are becoming more aware of the potential for leveraging remittances and diaspora wealth for raising development finance.
Recent trends and outlook for 2011-12 Newly available data show that officially recorded remittance flows to developing countries fell to $307 billion in 2009, registering a 5.5 percent decline (table 1).2 The decline in remittances during the global financial crisis was modest compared to a 40 percent decline in foreign direct investment (FDI) between 2008 and 2009 and a 80 percent decline in private debt and portfolio equity flows from their peak in 2007 (figure 1). Thus, remittance flows became more important as a source of external financing in many
Migration and Remittances Unit World Bank
13
November 8, 2010
Outlook for Remittance Flows 2011-12 Recovery after the crisis, but risks lie ahead
By Sanket Mohapatra, Dilip Ratha and Ani Silwal1
Officially recorded remittance flows to developing countries are estimated to increase by 6 percent to $325 billion in 2010. This marks a healthy recovery from a 5.5 percent decline registered in 2009. Remittance flows are expected to increase by 6.2 percent in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012. (Note that the World Bank’s definition of developing countries has changed: Poland, which is estimated to have received $9.1 billion in 2010, is no longer classified as a developing country.) This outlook for remittance flows, however, is subject to the risks of a fragile global economic recovery, volatile currency and commodity price movements, and rising anti-immigration sentiment in many destination countries. From a medium-term view, three major trends are apparent: (a) a high level of unemployment in the migrant-receiving countries has prompted restrictions on new immigration; (b) the application of mobile phone technology for domestic remittances has failed to spread to cross-border remittances; and (c) developing countries are becoming more aware of the potential for leveraging remittances and diaspora wealth for raising development finance.
Recent trends and outlook for 2011-12 Newly available data show that officially recorded remittance flows to developing countries fell to $307 billion in 2009, registering a 5.5 percent decline (table 1).2 The decline in remittances during the global financial crisis was modest compared to a 40 percent decline in foreign direct investment (FDI) between 2008 and 2009 and a 80 percent decline in private debt and portfolio equity flows from their peak in 2007 (figure 1). Thus, remittance flows became more important as a source of external financing in many